'Unaccredited' drivers

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In response, Mr Howarth and the taxi drivers that UberX's operations are illegal because it allows or aids "unaccredited" drivers to carry out a passenger service for a fare, in breach of the Passenger Transport Act.

The case affects the drivers of Uber's discount arm, UberX, but does not affect its other services like UberTAXI, which operates similarly to taxis or its premium hire car service UberBLACK or drivers for those services.

Bruce McClintock, SC, for Uber, argued during court proceedings on Tuesday the cross-claim was defective and should be struck out because it did not join all relevant parties, namely 5000 UberX "partner drivers".

Mr McClintock said the outcome of the claim also involved the court determining whether UberX's drivers committed a criminal offence.

"One would have thought the drivers would want to be heard on that as it affects their rights and liabilities as third parties," Mr McClintock said.

Representing Mr Howarth and the taxi association, barrister Scott Robertson said the contracts the drivers operated under gave them an opportunity to make an uncertain quantum in earnings and conferred no rights upon them and no obligations on UberX.

But Justice John Sackar disagreed with this argument, instead finding the cross-claim did concern whether the drivers were partly complicit in criminal contraventions, allegations they were entitled to be heard on.

Quasi-class action

Justice Sackar declined to strike the cross-claim out but said the case could have to proceed as a quasi-class action with a select group of UberX drivers joined as representative defendants on behalf the whole 5000.

"It does raise the spectre of a huge waste of time, effort and potentially flawed proceedings if the parties are not enjoined," Justice Sackar said.

It comes as UberX faces a torrent of other legal claims including a Melbourne case that could determine whether driving for UberX is a criminal offence.

The company is also battling the Tax Office in the Federal Court claiming its "driver-partners" are being unjustly levied excess GST obligations.

Elsewhere in the world, Uber is facing a class action in California where drivers are seeking to be defined as employees rather than independent contractors to gain entitlements including health benefits, could influence reform to laws in Australia that define workers.

Uber is also now facing fresh legal action in England where London minicab drivers launched a claim against it last week.